Ranking sealed high-bid and open asymmetric auctions

摘要

For an important family of asymmetric auctions, we show that the seller's expected revenue is higher in the sealed high-bid auction than in the open auction. This is true for arbitrary numbers of weak and strong buyers. We establish many interesting properties of the linear asymmetric auction model. We show how the linear model can also be useful for non-linear models. Revenue comparisons for the two auction formats are performed using data observed in U.S. forest timber auctions. We show that the revenue difference is minimal with a fixed number of participants, but can be as high as 14% when the difference in participation is taken into account. The revenue difference predicted by the linear model is quite similar to the empirical results of Athey et al. (2004). (c) 2006 Elsevier B.V. All rights reserved.